Newly Updated Liability Laws have Mexico Insurance Providers Concerned

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The new maximum liability limits in effect in Mexico may stress loss ratios and negatively impact Mexico Insurers, according to leading Mexico Insurance provider and AMIS (The Association of Mexico Insurance Institutions)

The Mexican Government has recently increased substantially the maximum amount that courts can impose for a fatality caused by a negligent driver, business, or property owner in Mexico. The new state limits have generally increased by a factor of 5-7 times the previous limit. For a list of the new state by state limits, visit

This change impacts virtually all liability policies written by Mexico Insurers. For example, an Auto Insurer in Mexico who has collected premium in the past for a $ 300,000 liability limit would never expect to pay that much in a claim based on the old law. Under the new law, claims for insureds who cause a negligent death will approach that amount.

“The problem for these insurers is that based on this new law, many insurers will be inadequately reserved for future losses. Imagine an insurer who currently covers hundreds of thousands of auto policies in force in Mexico with a $ 300,000 liability limit (both tourist and resident auto policies) and has charged rates based on the expected losses from the old limits...and is now faced with paying potentially much higher claims”, stated Derek Kartchner, Chief Revenue Officer for

Kartchner goes on to say that any purchaser of insurance, whether in the USA, Canada, or Mexico should always check the insurers AM Best rating. Consumers would never purchase insurance from less than an A- rated insurer in the USA or Canada, and should use the same level of care when purchasing from Mexico Insurers.

Following are some AM Best ratings of various popular Mexico Insurers or their parent companies. Consumers are encouraged to visit to verify the financial rating of their insurer.

ACE:                                     A+, Secure, Superior
ABA:                                     Recently Purchased by ACE
ANA:                                     Unrated
El Potosi:                                 Unrated
GNP:                                     A-, Secure, Excellent
Mapfre:                                    A- Secure, Excellent
Qualitas:                                 B-,Vulnerable, Fair

Jim Labelle, CEO of MexPro’s parent, International Insurance Group, Inc. summed up the situation. “I expect that most insurers will likely scramble to buy liability treaty reinsurance for this increased exposure….and this process may be much easier for highly rated insurers”. Labelle expects that by the fall of 2013 most insurers will have reacted to the new law in a fiscally responsible way that ensures solvency and profitability, and most importantly, claims paying ability. “But some may not”, Labelle cautioned. Labelle suggests consumers can keep track of insurers ratings by visiting the AM Best website for updates.

For more on the new law, interested parties can contact the Mexico Insurance Association via is the leading provider of Mexico Auto, RV, Motorcycle, Homeowners, and Watercraft insurance for Americans and Canadians who visit or live in Mexico. For more information, visit MexPro also distributes its products via thousands of agents in the USA, Canada, and Mexico via its portal for licensed insurance agents.

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